Can’t Afford a Home? Get One for Free (or Cheap)

Your home is the biggest investment you’ll ever make. But not everyone has spare money to invest in property. Is it possible to get a free house? It sounds like science fiction, and sure, it isn’t easy. However, provided your income isn’t high, there are loads of assistance programs and grants.

So, although you may not get a free house in your own name just like that, you certainly get a home for much less than you thought. And if you take the money you might otherwise have spent on rent into account counseling might as well say you got a free house.

In the past, we’ve looked at how to raise money to buy a house fast; the things you should look into when you buy a cheap house, and how to reduce your costs if you decide to build a house. This time, we’ll look at grants and programs that help low to medium income families get a place they can call home.

Federal Housing Administration (FHA) Loan Insurance

Just raising the down payment for a house can present an enormous obstacle. The FHA (a division of HUD) helps home buyers to secure great property deals by insuring their loans. Since your lender no longer has to worry about you defaulting on payments you get:

Lower down payments when you close the deal.

Reduced closing costs.

Easy qualification for credit.

This in itself may not reduce the overall cost of your home, but it does make it easier to enter the housing market or to get a home when you are past retirement age. Over and above that, you can get an energy efficiency grant that covers the cost of making your home use less energy. You win all the way because your utility bills are now much lower too.

If you’re interested in this program, talk to an HUD-approved housing counselor. Mid-income families might still qualify, so don’t think there’s no help available if you’ve crossed the bar between low and mid income.

Operation HOPE

Operation HOPE is a HUD-approved housing counseling program that can help you to land FHA help and talk you through affordability issues and what you can do to cope while buying your own home. Both this program and FHA loan insurance are specifically intended for low-income families.

Housing Choice Voucher Homeownership Program

If you have leased a HUD-assisted home, you may be able to lease to buy. In other words, your rental contributes to a time when your leased home will become your very own. Since you’d be paying down less money anyway, it could be said that this is a way of getting a “free” home.

Self-Help Homeownership Opportunity Program (SHOP)

What if you could lower the cost of your home by helping others in your free time? You can! Simply become part of the SHOP program, and as a HUD beneficiary, your time goes towards paying down your home. Help people paint their houses, install drywall, or do a bit of carpentry. Turn your skills into big home-buying savings.

State Sponsored Programs

Low and mid-income families can also look for state sponsored programs. There are so many of them that it would be impossible to list them all, but a little online research will help you to track down the programs in your state. Some of these may even offer grants, though admittedly, there are fewer grants available these days than there once were.

Grants Watch

If you can actually be officially classified as “homeless,” you could even qualify for a grant (AKA free money). As we previously mentioned, there aren’t all that many around for home buyers anymore, but Grants Watch will help you to keep an eye on all kinds of grants for low-income, and you might even spot one that helps with housing in your area.

The Salvation Army

When funds are available, the Salvation Army sometimes helps people with rental and mortgage. And if you really have nowhere to go, they’ll help you with temporary housing. What’s on offer depends on current demand, your circumstances, and the state you’re living in.

The USDA

If you live in a rural area and have a low income, the USDA might also help you with loans. Although these loans must still be repaid, it’s a great help to families that wouldn’t qualify for private funding.

Help with Down Payments

It’s not only low-income families that struggle to afford a home. For mid-income families, raising enough cash for the down payment can be all-nut-impossible without help. State, city and private organizations often offer help with down payments, so don’t think all the help is for low-income or homeless families!

Help for the Disabled

Disabled World has put together information on a wide variety of loans and grants for people with disabilities, and of course, some of these include loans or grants that could help you to get a home.

Other Down Payment Assistance Programs

Down payment assistance isn’t always a loan, and if it is, it could be a low-cost loan. You could qualify for grants you don’t have to repay unless you sell up in a specified time. There are also programs for people in certain professions, for example, teachers and fire-fighters.

As always, HUD has a role to play, so begin your search for help that could ultimately save you thousands here.

Getting Free Building Materials

If you’re building or renovating a home, you can cut costs by being alert for opportunities to get free building materials. Here are some ideas:

Look what people have put out for collection and help yourself. You could get wood, hinges, or even reusable bricks.

Too much of one thing and not enough of another? Various websites facilitate bartering transactions where you give stuff to get stuff.

Visit recycling centers or the local dump. It may take time to find and gather materials, but you could hit the mother-lode!

Visit the freecycle website to find out whether you can get recyclable second-hand building materials in your area.

Talk to construction foremen at building sites. If they have materials they are going to discard, they may be good enough to give you first choice on free stuff.

Is There Really Such a Thing as a Free House That’s Yours?

Unless you are in extremely dire straits and have found a kind benefactor or charity organization that will help, the answer to this question is “no,” but you can certainly get help – and you can reduce the costs of buying a house quite substantially. Theoretically, you could offset the amounts that come out of your pocket against the rent you might have paid, but home ownership isn’t for everyone. If you’re likely to move within the next couple of years, you may find that rental works out cheaper than buying or selling.

Find out what help is available, what your costs will be, and weight that against what you would pay for rental.